Comdisco Hops on SSP Bandwagon

Posted on January 02, 2001

Comdisco is staking claim to a piece of the fast-growing storage service provider (SSP) market by launching a managed storage services division. The Comdisco Storage Services (CSS) division will plan, build, and manage on-site storage area network (SAN) and network-attached storage (NAS) architectures. It will also offer high availability, data protection, and recovery services, and provide e-businesses hosted storage services at alternate locations or at one of Comdisco's technology service centers.

CSS will leverage Comdisco's total infrastructure - business divisions in web services, networking, and disaster recovery - as well as 48 international technology service centers and the eighth-largest high-speed network in the U.S. "This (endeavor) makes business sense for a lot of reasons," says CSS general manager Mark Avery, who cites customer demand as an impetus for the new division. "Customers will trust Comdisco with their backup and production data because we're the company they come to when they have a disaster," adds Avery.

Analysts agree that customer loyalty carries weight in the new SSP market. "From the customer side, I think it's nice to have a choice of an established company," says Doug Chandler, program manager for International Data Corp.'s storage and data-management services program. "One of the advantages Comdisco has is a lot of relationships with larger companies, which the start-ups are still trying to establish," Chandler notes.

Comdisco is solidifying relationships with storage vendors such as EMC. Comdisco has become a member in EMC's new xSPerience Provider Program for planning and using EMC-based storage products. Both companies will pursue joint marketing and sales. In 1999, Comdisco and StorageNetworks Inc. (SNI) forged a partnership that "hasn't done much," says Comdisco's Avery.

Speculation that the two companies are now competitors has been denounced by Avery, who notes that the SNI/Comdisco partnership might be revived. "Our sweet spot is with enterprise customers. Those are the people who know and trust us. SNI is fishing in the dot.com world and doing most of its work through co-location companies. So I don't think we'll ever really bump heads. There is a play for us to partner with them because our core competency is availability and recovery, and theirs is primary production storage at Web location centers." However, Dataquest senior analyst Adam Couture believes both SNI and Comdisco are now competitors, and their relationship bears watching.

Another factor that could differentiate storage services competitors is price. There are no typical pricing models for outsourcing storage, analysts say. Some companies use dollar-per-MB plans, but pricing storage services as commodities is difficult because many variables affect telecommunications charges, explains Comdisco's Avery. "It's hard to price services the way some of these other companies have. There's so much more to the equation than just dollar per megabyte." Often, the dollar-per-MB equation does not include the components for data management or protection, he warns.

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